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I get nervous when I go on television. At first I thought I would enjoy it.

I appeared on CNBC’s Kudlow & Cramer a couple of times in 2004. For my three- or four-minute segment I would spend about eight hours getting ready. To some extent, the producers prepare you by telling you what questions might be asked or topics covered. Even if I knew a lot about the topic I would practise over and over again.

A friend of mine, Stephen Dubner, who went on to co-author Freakonomics, accompanied me to the studio the first time I was on and for an hour beforehand peppered me with questions so I could feel comfortable. That helped a lot.

But in order to get really good at something you have to look at your past mistakes and study them. Like many people, I can’t stand to see myself on TV so I never went back and studied my video experiences. This is a flaw because I know the only way for me to improve is to review what I did wrong and try to improve.

So I was nervous when CNBC called last week and asked me to appear on the On the Money show on Friday night to discuss CNBC.com’s “Million Dollar Portfolio Challenge”.

The show’s booker was polite and somehow tolerated the fact that it took me three days to call back, given that I was unsure whether I wanted to do it.

Also, I have never won $1m in a stockpicking contest so it is hard to speak without experience, although many people are prone to do so.

That said, I do have ideas on how to win a game. Note that it is a game and not a 401k account. In other words, you can’t have rational, stable plays. You have to dive headfirst into ugliness. You have to walk the coals of fire. CNBC asked me to come up with 12 stocks to talk about on the show. Here are some:

First off, the subprime mess is the gift that keeps giving for contest participants. The media hyped it up so the average investor thinks the world is going to end. Nothing could be further from the truth, particularly with banks such as Barclays now buying subprime paper at 95 cents on the dollar.

■Fremont General: This bank has been unfairly crushed owing to the subprime mess. Unlike New Century Financial and Accredited Home Lenders, Fremont General never had a liquidity crisis because it lent on deposits.

■New Century Financial: Yes, New Century, the baby that started it all. The subprime mortgage lender’s shares are trading at $2 but its book value may be as high as $1bn, pricing its stock at $18 instead of $2.

■Impac Mortgage Holdings: This mortgage real estate investment trust has four core businesses, including long-term investment operations, which invests mainly in non-conforming Alt-A mortgage loans. These loans have also been dragged into the subprime mess. Its shares are trading at about $5 but I can easily see them over $10.

■Evergreen Energy: The “clean” coal manufacturer has announced a joint venture with TXU in which the Texas electric public utility would test Evergreen’s K-Direct coal refining process for potential use at TXU’s existing and proposed coal-fired plants. In February, Kohlberg Kravis Roberts and Texas Pacific Group agreed to buy TXU but this month a consortium of leading private equity groups moved closer to mounting a rival bid to trump the $45bn takeover offer. Evergreen’s stock, meanwhile, has fallen from $9 to $6 as some people think a sale could affect Evergreen’s deal with TXU. I think its shares could easily climb back up once the dust settles.

■PDL BioPharma: The company makes a ton of money from its cancer drugs but has been squandering it. Activist fund Third Point thinks the shares could double if it implements cost cuts.

■Opsware: This provider of information technology automation software products has high short interest (short ratio of 11) but has $90m of cash, which it could use to buy back shares and scare the shorts. Mike Ovitz, a director, recently bought $1m worth of stock. The shares are down from $9 to $7, but could go right back up if the company announces it is going to start buying back shares and squeezing the shorts.

■Crystallex International: The company mines and processes gold, primarily in Venezuela. Its stock has been hit hard since Venezuela decided to start nationalising oil interests, although it is worth noting President Hugo Chávez has said nothing about gold companies. As long as a company is producing gold, the general theory is that Chávez will leave it alone. Something else worth noting about Crystallex is that it is a Canadian, not an American, company. Also, high quality mutual fund Jennison Natural Resources is accumulating the stock.

So there you have it. Ugliness, fear, pain. Again, these may or may not be good long-term investments. In fact, some of these stocks could end up going to zero.

That said, this is a contest that has winners each week. So all we want is lots of volatility amid a glimmer of hope.

Throw in some insider buying, some short squeeze potential, some crisscrossing media messages and some good ol’ fashioned guts and we might have ourselves a contest here.